Forex Flash: US economy best of a bad bunch - BTMU

Derek Halpenny, European Head of Global Markets Research at the Bank of Tokyo Mitsubishi UFJ writes that the US economy remains the best of a bad bunch at present and optimism is high, “(possibly too high?)”, as the economy starts to feel the impact from the sequester spending cuts that were triggered on 1st March.

He writes, “Today, Paul Ryan, the chairman of the House Budget Committee will unveil the Republicans’ House of Representatives 2014 budget and beyond which will include USD 4.6trn of spending cuts with an aim to balance the budget in a decade. This will be countered for the first time in four years by a Democrats’ budget in the Senate. Sequestration and tax hikes may start to become evident in the data which along with renewed focus on the divergence in fiscal policy in Congress may start to dampen the recent enthusiasm for the dollar.”